Direct-to-consumer brands (D2C), which we define as ecommerce companies founded online that sell products directly to consumers without relying on third party retailers, have had a significant impact on the retail industry and this direct to consumer report reveals how consumers engage with these digitally native brands.

From Dollar Shave Club to Purple to Birchbox, brands that sell products of all kinds have disrupted the industry and forced traditional retailers to rethink retail in order to compete. This includes rethinking marketing strategies to include more engaging content, the emergence of online subscription-based businesses, and the availability of high-quality products that resonate with a niche audience.

This has, inarguably, lead to better customer experiences industrywide.

Consumers are taking notice.

Consider that:

  • D2C brands on the Rakuten Advertising network saw an average year-over-year same store order growth during the 2019 holiday season of 39%.
  • Rakuten Intelligence data shows that 30% of all online shoppers bought from at least one D2C brand in 2019.

Both figures only stand to grow for several reasons:

  • Consumers are actively seeking out products that are innovative, align with their beliefs, or offer something they can’t get anywhere else.
  • Turnkey ecommerce platforms have made it easier than ever for brands to begin selling directly to consumers.
  • People tend to view D2C brands as more innovative, engaging, and personalized than traditional brands.

That’s why Rakuten Advertising sought to gain a greater understanding of how people learn about, engage with, and ultimately buy from D2C brands.  We surveyed 1,000 adults across a representative sample of the US population who made at least one purchase from a D2C brand.

Here’s what we found:

  • More than 50% of all consumers who have bought from a D2C brand across all product categories expect their spending on D2C brands to increase in the next year.
  • 80% of all people who have bought a D2C brand recall seeing or hearing about those brands on social media and 60% follow a D2C brand on social media. This means that retailers that want to stand out must find their voice on social media and shift spending towards social channels that their primary audience is engaging on.
  • 68% of people who have bought a D2C brand before are excited when they see those brands in a physical retail location. This finding offers ample omnichannel opportunity for emerging brands to grow their business offline and for established retailers to add brands that have been traditionally D2C to their own in-store product mix.

Our D2C Report has more insights on how specific generations learn about and engage with D2C brands as well as the purchasing habits of people who have bought specific product categories from D2C brands.

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